The Tongue River Railroad Co. on Oct. 16 officially filed with the U.S. Surface Transportation Board its revised application for a shorter, $490m line segment that would only run from Arch Coal’s (NYSE: ACI) planned Otter Creek coal mine in the Ashland/Otter Creek area to a BNSF Railway mainline northeast of there at Miles City, Mont.
The Tongue River Railroad, under prior ownership, had been working since the 1980s through entrenched environmental group and local rancher opposition to build a longer rail line that would connect with the BNSF at both ends, with the southwest end at Decker, Mont., and the northeast end at Miles City. That would have allowed for both access to undeveloped coal reserves in the Otter Creek area, located about midway along the longer line segment, and would have also allowed shorter routing of BNSF trains moving to Upper Midwest markets from existing mines like Cloud Peak Energy’s (NYSE: CLD) Spring Creek mine. That full line would have cut out a big loop to the north and west that the current BNSF line takes before swinging east again to run by Miles City.
But, with new ownership by Arch and others, the TRRC earlier this year told the board it would seek the shorter rail route, which the board had essentially approved already in a segment of the larger project called TRRC III. As the expected operator of the planned TRRC line, BNSF joined in the Oct. 16 re-application. This new application only makes minor adjustments to the line segment considered in the TRRC III case.
The Oct. 16 filing noted that Arch’s Otter Creek Coal LLC subsidiary filed a mine permit application with the state in July for the planned Otter Creek surface job, which would be a ne”w Powder River Basin mine producing up to 20 million tons per year. The application said the railroad would serve “mines in the Ashland area, but didn’t name any others besides Otter Creek. Notable is that one previous line segment would have led to an abandoned mine project called Montco.
“Due to its shorter length, the TRRC rail line, as refined, will require less land to be acquired for the right-of-way, will have reduced curvature in the route, will result in a rail line that is farther from the Tongue River with attendant environmental, social and economic benefits, will result in fewer at grade crossings, and will result in less encroachment of the Miles City fish hatchery facilities,” the filing said. “The TRRC line, as refined, will result in a greater volume of earth work but the increased earth work will provide for greater stability and less erosion potential.”
Arch and BNSF each hold a little less than 35% of the holding company that controls the TRRC. TRR Financing LLC controls the rest of the holding company. Published reports say that part of the railroad is owned by Forrest Mars Jr., a billionaire who is part of the Mars family of Mars candy bars fame.